Reports of Hon Hai buyout send Quanta shares up by 6.8%

Shares of Quanta Computer Inc (廣達電腦), the world's biggest notebook computer maker, increased by the daily limit after reports surfaced that Hon Hai Precision Industry Co (鴻海精密) planned to take over the company.

Shares of Quanta rose 6.8 percent to NT$51.80 (US$1.6) on the Taiwan Stock Exchange yesterday, while Hon Hai also gained 1.5 percent to close at NT$209.

Hon Hai, the world's largest electronics maker, will offer one share for between 3.53 and 3.89 shares of Quanta, the Chinese-language Wealth News newspaper (財訊快報) reported yesterday, without citing sources.

These reports came two days after Quanta completed the sale of its unprofitable Quanta Display Inc (廣輝電子) unit to AU Optronics Corp (友達光電) for NT$71.5 billion in stock.

In a filing submitted to the Taiwan Stock Exchange yesterday, Quanta denied the merger speculation, which has been circulating in the market for some time.

"There are definitely possibilities for any reunion or separations. Hon Hai is one of our closely working alliances," Michael Wang (王震華), Quanta's new president, said about the merger on Aug. 30, when the company announced its second-quarter earnings.

Quanta and Hon Hai have a stable relationship, as Quanta buys components such as cables and connectors from the latter, he said.